Stellantis seeks new CEO after Tavares steps down

The moves come less than two months after Tavares announced that he would step down at the conclusion of his term in early 2026. In October, the company announced other sweeping management changes, including a new North American CEO. At the time, Tavares called this a “Darwinian period for the automotive industry.”

In announcing Tavares’ resignation, Senior Independent Director Henri de Castries said, “Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the CEO. However, in recent weeks different views have emerged which have resulted in the board and the CEO coming to” the decision.

Tavares received total compensation of €36.4 million ($38.3 million) as of Dec. 31, 2023, according to the Netherlands-based automaker’s most recent annual report. His compensation included a base salary of €2.0 million, in addition to benefits and incentives.

State of the auto industry

Stellantis confirmed the lowered guidance it released on Sept. 30, pointing to weakness in the North American market and the industry worldwide.

At the time, the automaker said it had accelerated its inventory right-sizing plan for North America: It would target no more than 330,000 units of dealer inventory by year-end 2024 vs. a previous target of Q1’25.

The auto market is in a delicate position. Consumers are ready to take advantage of sales, but automakers have more vehicles than they can handle. Meanwhile, manufacturers are still trying to retool for a more electric and high-tech future. The health of the auto market plays into the steel market, as steel is a major component of automaking, and scrap is retrieved from end-of-life vehicles.

US light-vehicles sales grew by 1.7% month over month in October, clocking in at an adjusted 1.33 million units, according to the US Bureau of Economic Analysis. That’s up 10.6% compared to a year ago.

While sales have improved, helped in part by the Federal Reserve’s half-point rate cut in September, new-vehicle inventory continues to rise.

“As the year winds down, we’re seeing some interesting trends in the auto industry,” Cox Automotive wrote in a blog post. “Inventory levels and incentives are rising. At the same time, we’re looking at nearly the highest days’ supply in two years. It’s a bit of a balancing act for automakers as they try to maintain discipline.”

For the first time since the pandemic, the total US supply of available unsold new vehicles was more than 3 million at the end of October. According to Cox, that was an increase of 29% from last year. With 3.04 million units available, days of supply increased to 85, an increase of 14% year over year, Cox added.

UAW responds

The United Auto Workers, which had called for Tavares to resign for some time, praised the move while announcing it finalized an employee leasing agreement at its joint-venture battery plant with Samsung SDI in Kokomo.

“We won this leasing agreement in our 2023 contract negotiations, but under the failed leadership of Carlos Tavares, the company delayed making good on their commitment to workers in Kokomo,” said UAW President Shawn Fain in a statement. “This pattern of going back on agreements and violating our contract was part of what led us to call for Tavares’s resignation.

“Tavares’ resignation is a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long,” Fain continued. “Tavares is leaving behind a mess of painful layoffs and overpriced vehicles sitting on dealership lots.”

As of Dec. 31, Stellantis had a total of more than 258,000 employees worldwide, of which 81,300 were in North America. About 90% are represented by collective bargaining agreements.